Softwood lumber is pictured at Tolko Industries in Heffley Creek, B.C., on April, 1, 2018. THE CANADIAN PRESS/Jonathan Hayward

Lumber company shares rise on news U.S. intends to cut softwood duties

CIBC analyst suggests average U.S. duties to drop from US$67 per thousand board feet to US$30

Shares in Canadian lumber companies rose Tuesday on news that the U.S. government could reduce duties on softwood lumber imports in August.

In early trading in Toronto on Tuesday, Canfor Corp. stock rose as much as 7.5 per cent, West Fraser Timber Co. Ltd. jumped by 6.2 per cent and Resolute Forest Products Inc. was up three per cent.

The shares closed at lower levels, with Canfor up 4.3 per cent, West Fraser up 2.1 per cent and Resolute down 5.2 per cent.

In a report on Monday, CIBC analyst Hamir Patel suggested average U.S. duties would drop from about US$67 per thousand board feet to about US$30 based on current pricing levels of about US$400.

“According to trade contacts, preliminary revised duty determinations from the U.S. government have been communicated to the Canadian industry,” Patel said.

“We expect Canadian lumber equities to respond positively to this news as these rate revisions were better than most Canadian industry participants were expecting.”

West Fraser’s rate may fall from 23.6 to 9.1 per cent, Canfor’s from 20.5 to 4.6 per cent and Resolute’s from 17.9 to 15.8 per cent, he said.

The report says the “all others” duty rate could fall to eight per cent from 20.2 per cent, but added it’s not expected that Canadian companies will receive any refund or credit for overpayment until the trade dispute is resolved, something not expected for two to three years.

A U.S. Commerce department spokesman confirmed on Tuesday that preliminary results of an administration review were issued on Monday but said the impact on softwood lumber deposit rates are not yet determined.

READ MORE: Canfor shareholders reject Pattison’s takeover offer

The U.S. imposed duties on most Canadian softwood exports in April 2017, alleging that Canada was unfairly subsidizing its industry and dumping wood into the U.S. at unfair prices.

This is the fifth time Canada and the U.S. have fought over the same issues.

In September, a joint Canada-U.S. trade panel gave the United States 90 days to rethink its tariffs, finding there was no evidence Canadian imports were causing injury to the U.S. industry.

The Canadian Press

Like us on Facebook and follow us on Twitter

softwood lumber

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Haitian foster children arrive in Nelson after months-long lobbying effort

Marie-Paule Brisson and Sebastien De Marre have parented girls age 12 and 8 since they were babies

Nelson hospice starts Walk and Talk group in Lakeside Park

The Walk and Talk Grief Group is offered free to anyone grieving the death of a loved one

From baseball stars to forest fires: Southeast Fire Centre water bomber has an interesting past

Tanker 489 is stationed in Castlegar this year, but in the 1960s it belonged to the L.A. Dodgers.

RDCK to implement new emergency alert notification system

System also includes sends alerts for water advisories

B.C. sees 25 new COVID-19 cases, community exposure tracked

One death, outbreaks remain in two long-term care facilities

VIDEO: Alberta man rescues baby eagle believed to be drowning in East Kootenay lake

Brett Bacon was boating on a lake in Windermere when he spotted the baby eagle struggling in the water

Conservationists raise concerns over state of care for grizzly cubs transferred to B.C. zoo

‘Let them be assessed now before their fate is sealed,’ urges B.C. conservationist Barb Murray

B.C.’s COVID-19 job recovery led by tourism, finance minister says

Okanagan a bright spot for in-province visitor economy

National Kitten Day aka the ‘purrfect’ day to foster a new friend

July 10 marks National Kitten Day, a special day to celebrate all things kittens

Lower Mainland YouTubers claim to be Kelowna display toilet ‘poopers’

RCMP can not speak to legitimacy of video, will be investigating

Haida matriarchs occupy ancient villages as fishing lodges reopen to visitors

‘Daughters of the rivers’ say occupation follows two fishing lodges reopening without Haida consent

Conservatives say police should be called into investigate WE charity scandal

Trudeau is already under investigation by the ethics commissioner for potential conflict of interest

Amber Alert continues for missing Quebec girls, 6 and 11, and their father

Police issued the alert for Norah Carpentier, 11, and Romy Carpentier, 6, from Levis, Que.

Most Read